Crypto currency exchange FTX collapses.

[TheGreenAnger]

It has been a tumultuous week for the crypto currency market. The numbers of dollars lost or at risk are eye watering.

https://fortune.com/crypto/2022/11/10/s ... ed_article

The swift collapse of the cryptocurrency exchange FTX sent more shockwaves through the crypto world on Thursday, with authorities now investigating the firm for potential securities violations and analysts bracing for a further downturn in crypto prices.

FTX had agreed this week to sell itself to its bigger rival Binance after experiencing the cryptocurrency equivalent of a bank run. Customers fled the exchange after becoming concerned about whether FTX had sufficient capital.

A person familiar with the matter said that the Department of Justice and the Securities and Exchange Commission (SEC) were examining FTX to determine whether any criminal activity or securities offenses were committed.

And on Thursday, Reuters reported that the Securities Commission of the Bahamas had frozen the assets of FTX Digital Markets, a subsidiary of the cryptocurrency exchange.

This week’s developments marked a shocking turn of events for FTX CEO and founder Sam Bankman-Fried, who was hailed as something of a savior earlier this year when he helped shore up a number of cryptocurrency companies that ran into financial trouble.

The investigation into Bankman-Fried and FTX by those in the crypto world as well as securities regulators is centering on the possibility that the firm used customers’ deposits to fund bets at Bankman-Fried’s hedge fund, Alameda Research. In traditional markets, brokers are expected to separate client funds from other company assets. Violations can be punished by regulators.

Meanwhile, investors in popular digital currencies got some relief from the latest crypto crisis Thursday after days of selling. Bitcoin rose to $17,691 after dropping as low as $15,512 on Wednesday. Ethereum rose 12%. The gains came after a government report showing inflation had cooled a bit last month gave a lift to riskier assets.

The crypto world had hoped that Binance, the world’s largest crypto exchange, might be able to rescue FTX and its depositors. However, after Binance had a chance to look at the books of FTX, it became clear that the smaller exchange’s problems were too big to solve. Binance announced its withdrawal from the deal on Wednesday.

A person familiar with the dealings between FTX and Binance described the books as a “black hole” where it was impossible to differentiate between the assets and liabilities of FTX and those of Alameda Research. This person spoke on condition of anonymity because they weren’t authorized to speak publicly about the matter.

This person said Bankman-Fried had committed the “ultimate sin” by tapping into FTX’s custodial assets to fund Alameda Research.

In a further illustration of FTX’s financial straits, Bankman-Fried asked his investors on Wednesday for $8bn to cover withdrawal requests, according to the Wall Street Journal, citing unnamed sources.

In a series of tweets on Thursday, the FTX founder and CEO said that he did not have enough liquidity to cover withdrawals and that he was more leveraged than he had thought.


The latest crisis in the crypto industry prompted renewed calls for stricter regulation. The White House press secretary, Karine Jean-Pierre, said the FTX developments highlighted “why prudent regulation of cryptocurrencies is indeed needed. The White House, along with the relevant agencies, will again closely monitor the situation as it develops.”

The collapse of cryptocurrency’s third-largest exchange is likely to cause further disruption across the crypto world, analysts say, meaning Thursday’s rally could be temporary.

The unwinding of FTX, as well as its shock of confidence to the system, will cause crypto prices to fall even further leading to “a new cascade of margin calls”, said analysts at JP Morgan in a note to investors. This would be similar to the selloff that happened after the collapse of the stable coin Terra earlier this year, when prices continued to decline weeks after its failure.

“This deleveraging is likely to last for at least a few weeks unless a rescue for Alameda Research and FTX is agreed quickly,” JP Morgan analysts wrote.

The crypto industry is waiting to see what other companies are affected by the FTX collapse. The venture capital fund Sequoia Capital said on Thursday it was writing down its total investment of nearly $215m in FTX.

https://www.theguardian.com/technology/ ... estigation

[ribrash]

Where is our forum expert when it all needs explaining ?

[Boac]

Well, he's back from his hols, but maybe he cannot afford to post?

[OFSO]

There are certain subjects the mere mention of which cause my brain to switch to standby. Crypto currency is one of them.

[Woody]

Nothing new in a spectacular market crash realignment

https://www.investopedia.com/terms/d/du ... bubble.asp

[TheGreenAnger]

There are certain subjects the mere mention of which cause my brain to switch to standby. Crypto currency is one of them.

Don't lose yourself in the complexity of crypto, just look at the underlying financial dynamics of this current fiasco and note the depressingly familiar dynamics to the more traditional 2008 market crash made far worse in this new case by the lack of regulation of the crypto markets. We humans seem to be doomed to making the same mistakes over and over again, as per Woody's quoted example.

In this case it appears that Sam Bankman-Fried (never was a name more apt) has been using his client's money invested through the FTX exchange he set up, to speculate (i.e., bet) on the very same market he manipulated though his own exchange issued tokens (akin to printing a form of money or magicking money out of the ether) through another trading company, Alameda, he owns (a direct conflict of interest) to leverage differences in crypto prices on other exchanges (price arbitrage). When this was noticed by a web-based commentator, there was a run on his exchange as people tried to cash out of the market, the FTX token, and exchange and his key rival (and ex investor) Changpeng Zhao, who runs his own equally unregulated, exchange, reneged on an intention to loan additional coinage to FTX to keep the market liquid and keep FTX afloat, the value of the FTX token collapsed and there was a form of a run on the "bank" causing FTX to collapse and rendering SBF's own personal wealth to go from $16 billion to zero in a day.

[TheGreenAnger]

FTX was incorporated in Antigua and Barbuda and headquartered in The Bahamas (go figure), where Bankman-Fried and his coterie of youthful uber-nerd executives (including Alameda executives) live together in a large apartment, swapping partners and living the life crypto fantastic, until this week that is.

https://www.efinancialcareers.co.uk/new ... m-bankman-

It's a bad day and week for millennials in crypto. 30-year-old Sam Bankman-Fried (SBF) has already lost 94% of his fortune and is facing questions as to the probity of his actions after the Wall Street Journal reported that his crypto exchange, FTX, lent $10bn to his affiliated trading firm, Alameda Research. Constance Wang, the 28 year-old ex-Credit Suisse analyst running the day-to-day operations of FTX is presumably sharing the pain. Caroline Ellison, another 28-year-old SBF protégé already appears to be out of a job.

Ellison was CEO of Alameda Research, which is being wound down as of this afternoon. Alameda was a crypto market maker with a reputation for aggressive trading strategies. SBF confessed today that these were being funded by money customers had deposited in FTX for their own trading purposes.

There's no indication that Ellison did anything illegal, and it's not clear which role she played in the use of FTX customer funds, if any, but she doesn't seem to have had a huge amount of experience prior to running a firm with an alleged $10bn of money sloshing around.

Before joining Alameda as a trader in March 2018, Ellison spent 19 months as a junior trader at Jane Street after graduating from Stanford University with a bachelor's degree in mathematics in 2016. In a podcast two years ago, Ellison explained that Jane Street was her first job out of college. A diehard mathematician and Harry Potter fan born of two economists, Ellison she hadn't wanted to go into trading but "just didn't really know what to do" with her life.

She was persuaded to join Alameda by SBF, who also previously worked for Jane Street. When she quit Jane Street, Ellison said she felt bad for staying such a short amount of time. However, this feeling quickly dissipated when she arrived at Alameda and discovered that she had "kind of more trading experience than a lot of Alameda traders," anyway.

In light of what has transpired, Ellison's podcast sounds a lot like a list of reasons why you need some experienced people around to help with decision-making. She says she was "kind of thrown into" making decisions at Alameda and that this was a shock after her 19 months at Jane Street where the decisions she'd made had been "pretty circumscribed." By comparison, in a start-up like Alameda, Ellison said she found herself making "a bunch of decisions," a lot of which were "really uncertain," and that this was "terrifying."

As FTX implodes and the crypto sector goes from winter to the potential eternal darkness and icy freeze of a heavily regulated black hole, financial services boomers are feeling some schadenfreude. Richard Handler, CEO of Jefferies, says on Instagram that he reached out to Sam Bankman-Fried with rescue advice in July. SBF didn't respond. "Just like a broken clock, even a boomer can be right sometimes," reflected Handler today.

https://www.efinancialcareers.co.uk/new ... kman-fried

Edited to ask what is it about these crypto currencies and companies that their "genius" founders all have sunames that Ian Fleming would have adored and used as Bond villains e.g. Bankman-Fried, Changpeng Zhao, Vitaly Dmitriyevich "Vitalik" Buterin ... etc

[PHXPhlyer]

Crypto giant FTX 'investigating abnormalities' following bankruptcy filing
Blockchain analytics firm Elliptic said that around $473 million worth of cryptoassets were “moved out of FTX wallets in suspicious circumstances early this morning.”

https://www.nbcnews.com/tech/crypto/cry ... -rcna56900

Officials at the crypto giant FTX have moved all digital assets offline as they investigate possible theft of crypto assets following their bankruptcy filing, their general counsel announced late Friday.

The crypto giant "initiated precautionary steps to move all digital assets to cold storage" on Friday, according to a tweet from Ryne Miller, general counsel for FTX, who added that the "process was expedited this evening — to mitigate damage upon observing unauthorized transactions."


That followed an earlier tweet from Miller that said officials were "investigating abnormalities with wallet movements related to consolidation of ftx balances across exchanges — unclear facts as other movements not clear."

"Will share more info as soon as we have it," he added.


Blockchain analytics firm Elliptic said that around $473 million worth of cryptoassets were “moved out of FTX wallets in suspicious circumstances early this morning,” but that it could not confirm that the tokens had been stolen.

Prior to Miller’s tweets, FTX officials appeared to confirm rumors of a hack on the firm’s Telegram channel, according to a CoinDesk report which said that the exchange had instructed customers to delete FTX apps and avoid its website.

“FTX has been hacked,” an account administrator in the FTX Support Telegram channel wrote in a message, according to CoinDesk.

Reuters could not immediately verify the details posted on FTX’s private Telegram channel.

The distressed crypto trading platform had struggled to raise billions to stave off collapse as traders withdrew $6 billion in crypto tokens from the platform in just 72 hours and rival exchange Binance abandoned a proposed rescue deal this week.

The announcement followed the news that FTX and its affiliated companies have started the process of filing for Chapter 11 bankruptcy, with founder Sam Bankman-Fried stepping down as CEO.

The filing represents a staggering turn for the cryptocurrency exchange, once reportedly valued at $32 billion and seen as the face of the industry thanks to its voluminous marketing and advertising efforts.

The resignation of Bankman-Fried, 30, is stunning. He was a crypto wunderkind who graced the cover of Forbes and Fortune and had emerged as a major Democratic donor and a leader of what has been dubbed the “effective altruism“ movement, which sought to reshape philanthropy.

FTX emerged as one of the most recognizable brands of the recent crypto boom, with sponsorship deals that put its logo on the Miami Heat arena and on the shirts of every MLB umpire.

On Friday, the Miami-Heat, in a joint statement with Miami-Dade County Mayor Daniella Levine Cava, called the news about FTX's collapse "extremely disappointing" and said they would immediately terminate their relationship with the company and find a new name for the arena.

Founded in 2019, FTX had within two years grown to 1 million worldwide users, with an average of $10 billion in daily trading volume. In 2021, it attracted $900 million in financing from big-name venture capitalists and hedge funds, including SoftBank Group and Sequoia Capital.

PP

[TheGreenAnger]

I must admit I bought into this in a speculative minor moment in 2019. My losses to date account to $2000.00. I feel I have been warned, which I appreciate!

My initial bet in fiat currency was £24,735.

Money, mammon...

viewtopic.php?p=350422#p350422

[TheGreenAnger]

https://www.theverge.com/2022/11/12/234 ... tocurrency

Hacked? More like misappropriated, most likely stolen by an FTX actor, most likely Bankman-Fried himself, or other actors? People should be en route to prison for this. SBF is turning out to look like being the Bernie Madoff of the crypto world.

FTX moved users’ funds to offline wallets early Saturday morning after a wave of “unauthorized transactions” drained hundreds of millions of dollars from the beleaguered cryptocurrency exchange. Ryne Miller, the general counsel at FTX US, didn’t confirm a hack, but said on Twitter that the company made the move to “mitigate damage” caused by the potential theft, as transferring funds offline, or to “cold storage,” helps prevents outsiders from gaining access to them.

The millions in funds evaporated from the platform shortly after FTX filed for chapter 11 bankruptcy on Friday, affecting the domestic FTX US trading platform, the global version of FTX, and Alameda Research. It’s still unclear how much is missing from the exchange, but a report from CoinDesk suggests the amount could total over $600 million, while the blockchain analytics company, Elliptic, puts this number at about $473 million.

FTX’s new CEO John Ray, who took the place of company founder Sam Bankman-Fried following his resignation on Friday, issued a statement through Miller’s Twitter account on Saturday afternoon. “We are in the process of removing trading and withdrawal functionality and moving as many digital assets as can be identified to a new cold wallet custodian,” Ray says. “As widely reported, unauthorized access to certain assets has occurred.” He adds that FTX is in contact with law enforcement and “relevant regulators” to address the situation.

“FTX has been hacked. All funds seem to be gone,” an admin on FTX’s official Telegram channel writes, while also instructing users to delete FTX’s apps and warning against going on the platform’s websites due to the presence of malware. FTX.com and FTX.us are currently down at this time of writing.

Some users on Twitter speculate whether a member of Bankman-Fried’s inner circle drained the exchange’s funds, with crypto sleuth ZachXBT stating “multiple former FTX employees confirmed to me they do not recognize these transfers.” Nick Percoco, the CEO of the cryptocurrency exchange Kraken, says the platform was able to track down the identity of the account in question, as the alleged thief used Kraken to offload the funds.

Last week’s report from CoinDesk helped set off FTX’s quick and catastrophic collapse, which indicated Alameda Research relied heavily on FTT, a sister token from FTX. This led Binance CEO Changpeng “CZ” Zhao to announce that his exchange would sell off its FTT tokens, causing the coin’s value to plummet and other customers to jump ship. As FTX struggled to make up for the reported $8 billion shortfall caused by the influx of withdrawal requests, Binance offered to buy the firm, but walked back on its plans just one day later, stating its “issues are beyond our control or ability to help.”

According to a report from Reuters, anywhere from $1 billion to $2 billion in customer funds remain unaccounted for after Bankman-Fried “secretly transferred” $10 billion from FTX to prop up Alameda Research. In a text message to Reuters, Bankman-Fried denied that the funds were secretly transferred, and reportedly replied “???” when asked about the missing funds. The outlet also found that Bankman-Fried added a “backdoor” to FTX’s accounting system that reportedly allowed the founder to change the company’s financial records “without alerting other people.”

https://www.theverge.com/2022/11/12/234 ... tocurrency

[Ibbie]

This mob were sponsoring the Cricket T20 world Cup in Australia.

[TheGreenAnger]

This mob were sponsoring the Cricket T20 world Cup in Australia.

Were also sponsors of the Mercedes F1 team, amongst other sports as well.

https://www.reuters.com/lifestyle/sport ... 022-11-11/

[PHXPhlyer]

NBA's Miami Heat cancels relationship, too.

Porn Site Once Again Submit Bid To Miami Heat For Stadium Naming Rights
A popular site offer $10 million to the name of new stadium

https://www.si.com/nba/heat/miami-news/ ... ing-rights

Before the Miami Heat decided to name their arena after the crypto currency company, FTX, the organization received another.

The popular adult film website, Bang Bros, offered the Heat $10 million for naming rights. With the Heat severing ties with FTX because of its recent collapse, Bang Bros has once again made another bid via social media.

"To @MiamiHEAT, in 2019 we submitted a 10 Million Dollar bid for the naming rights to the arena, suggesting the name Bang Bros Center (The BBC)," the company posted on Twitter. "Due to recent news about FTX, we are resubmitting our offer as the new home of the Miami Heat."


The Heat had been with FTX since June of 2021, but decided it was better to part ways after the company's downfall. Here's the joint statement the Heat and Miami-Dade County.

"The reports about FTX and its affiliates are extremely disappointing," the statement read. "Miami-Dade County and the Miami Heat are immediately taking action to terminate our business relationships with FTX, and we will be working together to find a new naming rights partner for the arena. We are proud of the impact our Peace & Prosperity Plan - sponsored by County Commissioner Keon Hardemon and funded through the original deal - is already having in preventing violence and creating opportunity for young people across Miami-Dade, and we look forward to identifying a new partner to continue funding these important programs in years ahead."

PP

[TheGreenAnger]

Mammon, money...

Elon Musk spent $44bn (£37bn) to buy Twitter two weeks ago. He now says it might be bankrupt – not him, but Twitter. So what happened to that $44bn?

On Monday last week, Sam Bankman-Fried had a net worth of $16bn. On Friday, his companies filed for bankruptcy and that net worth had apparently shrunk to zero. So what happened to the $16bn?

It is true that Elon Musk has many other assets, including his shareholding in Tesla. The Bloomberg Billionaires Index still ranks him top of the global league table, with $189bn on Friday’s close in New York, and Twitter must surely be worth something. No one knows what other assets Sam Bankman-Fried might have – maybe not very much – so his is a very different tale. But the common theme is the destruction of wealth, which should make us all think of the nature of wealth and, in particular, what is real and what is a shadow.

This matters because a lot of wealth has been destroyed. You can see this in all sorts of ways. Let’s start with billionaires. Out of the top 10 in that Bloomberg tally, eight are poorer now than they were at the end of last year. Musk is down by almost $82bn. Jeff Bezos, chairman of Amazon, is the next biggest loser, down $68bn.

The only two winners were industrialists in India: Gautam Adani, who with $138bn is now number three in the world, and Mukesh Ambani, with $92bn at number eight. The only other non-American in the top ten is Bernard Arnault, in second place, worth $160bn. He has built up the world’s largest luxury group, LVMH Moët Hennessy-Louis Vuitton. Even in these tough times, luxury is a good business to be in.

What has happened to billionaires has happened to most investors on a more moderate scale. The value of the entire stock of cryptocurrencies has fallen. We reported how $200bn had been wiped off cryptocurrencies in the space of two days last week. Millions of individual crypto-investors have been hammered in recent months, with one losing $40m with the collapse of Celsius Network. Sadly, there will be millions more with the FTX bankruptcy. My quick tally of the top 30 cryptocurrencies was some $783bn on Friday’s close. At their peak in November last year, they were worth $3,000bn.

Traditional assets have also fallen in value. For example, the S&P500 is down by 17 per cent this year, but the fall in non-traditional assets has been far greater. Why? The answer goes to the very root of the nature of wealth. There are many ways of trying to put a value on an asset, but stripped down they fall into two groups.

One valuation is the amount you pay now for an income stream in the future. For bonds, the calculation is explicit: the yield you get in interest payments to the maturity of the bond, when you also get back the capital. For equities, the sums are less clear because you don’t know how large the dividends will be, or what will happen to the company in the long run: will it be taken over – or go bust?

Nevertheless, you are basically buying an income stream. Much the same goes for property. You are buying the future rental payments. If you choose to live in the property you are, so to speak, paying yourself the rent. Prices of properties go up and go down, but there is a basis of assessing the value: what you would have to pay in rent to occupy the property in question.

With the second group of assets, there is no income stream. You are buying something different. It could be security. People buy gold because they know that for thousands of years it has been a store of value. It could be beauty. People buy paintings for the delight that they give to the viewer. It could be social status. In the UK, there is an established (if disgraceful) path for the rich to buy peerages by giving money to political parties. Exclusive clubs have high membership fees. But most frequently it is the expectation of some future capital gain, and the allure of that was particularly evident in the crypto-world.

One truly cringe-making example of people being enticed into crypto, and using FTX, was the infamous commercial with Tom Brady and Gisele Bündchen, which you can watch here. It was made just over a year ago and shows the then-golden couple ringing people they knew to lure them in. The really clever aspect was the idea that ordinary people were being invited to join an exclusive club, with the catchphrase “Are you in?” and the reply “I’m in”.

The warning that crypto was risky and this was not investment advice appeared in tiny print for about three seconds at the end.

With the first group of assets, there are rational ways of putting a value on them. With the second, there is no rational value. That does not mean there is no value, simply that it is impossible to calculate what it is. And that brings us back to what has happened in recent weeks.

Some of the losses – those of Jeff Bezos and his shareholding in Amazon, for example – can be explained. The business is doing all right, but not as well as people hoped. But in the case of FTX there was really no value at all, except the membership of a club created by an inspirational entrepreneur, and with members that included Tom Brady and Gisele Bündchen. The full story has yet to emerge, but already it is clear that, when the illusion was shattered, the wealth evaporated. There was nothing there.

And Twitter? Well there is something there, so it must be worth something. But no one, including Elon Musk, can know what that is… except that it is less than the $44bn he paid for it.

https://www.independent.co.uk/independe ... ml?r=61731

[TheGreenAnger]

The contagion spreads as investigators circle the beleaguered SBF.

Crypto lender BlockFi preparing for a potential bankruptcy filing as the repercussions of FTX's downfall continue to spread, according to a Tuesday report from the Wall Street Journal.

The company is also preparing for possible layoffs, sources familiar with the matter told the Journal. The firm said in a blog post on Monday that it has financial exposure to Sam Bankman-Fried's FTX, which filed for chapter 11 bankruptcy on Friday. BlockFi said that it had assets in the exchange as well as obligations owed by FTX's affiliated trading firm, Alameda Research.

"There are a number of scenarios that may be available to us, and we are doing the work now to determine the best path forward," the blog post noted, adding that it has the necessary liquidity to explore all options for what comes next.

BlockFi halted withdrawals and limited activity on its platform last week, blaming uncertainty around FTX's liquidity issues.

This summer, BlockFi was among a handful of crypto projects that agreed to a rescue from FTX as the market was rattled by the steep drop in the price of crypto assets. FTX furnished a $400 million revolving credit facility for BlockFi, which also included an option to acquire the company, the Journal reported.

Meanwhile, a separate Tuesday report from the Journal revealed that Bankman-Fried has been reaching out to potential investors in attempt to raise money to repay FTX customers. The 30-year-old, who stepped down from his position as CEO the week prior, spent the weekend with several staffers doing outreach for financial commitments that could make up some of the company's $8 billion shortfall.

https://markets.businessinsider.com/new ... se-2022-11

The collapse of Sam Bankman-Fried’s crypto empire has sparked a vast global investigation, with dozens of authorities circling the company as lawyers warn there could be 1mn creditors in its bankruptcy proceeding.

FTX said in court filings it was in contact with US federal prosecutors, the Securities and Exchange Commission, the Commodity Futures Trading Commission and “dozens of federal, state and international regulatory agencies” in the three days since the cryptocurrency exchange and more than 100 affiliated companies filed for Chapter 11 bankruptcy in Delaware.

The companies face at least 100,000 creditors, but that number could expand to more than 1mn, according to the filing. Most of the creditors were clients of Sam Bankman-Fried’s companies.

“There is substantial interest in these events among regulatory authorities around the world,” the filing said.

The statements provide fresh details on the sprawling scale and complexity of the multibillion-dollar bankruptcy of Bankman-Fried’s digital asset group, and the intense legal and regulatory scrutiny of the 30-year-old former billionaire’s businesses.


“The events that have befallen FTX over the past week are unprecedented,” the court filing said. “Barely more than a week ago, FTX, led by its co-founder Sam Bankman-Fried, was regarded as one of the most respected and innovative companies in the crypto industry.”

Bankman-Fried had agreed to step down as chief executive at 4.30am on Friday after late-night meetings with his lawyers, the filing said.

Restructuring specialist John Ray, known for his work on Enron, has taken over the company. Five independent directors have been appointed to oversee different linked companies, led by former US federal judge Joseph J Farnan Jr, after lawyer Stephen Neal backed out of a board position.

The US filing comes after financial regulators in the Bahamas appointed liquidators to run a key FTX entity as the country’s authorities seek to “protect the interests of clients, creditors and other stakeholders globally”.

The Securities Commission of the Bahamas said on Monday it had won court approval to appoint two partners from PwC, one based in the Bahamas office and the second in Hong Kong, to oversee the unwinding of FTX Digital Markets, an entity at the centre of the crypto group’s vast trading platform.

Authorities in the Caribbean nation, where Bankman-Fried lived, are investigating FTX, which used its Nassau base to build a crypto derivatives trading operation that accepted money from thousands of customers around the world.

The US filing confirms FTX suffered a “cyber attack” on Friday. Blockchain research firm Elliptic estimated $477mn had been stolen in a hack of the exchange.

The company has also hired “investigative, forensic and cyber security experts” to work with lawyers from Sullivan & Cromwell, FTX’s longtime legal counsel, which has been advising the company on the bankruptcy process and working with FTX general counsel Ryne Miller, who formerly worked for the firm.

Alvarez & Marsal has been hired as a financial adviser. A team from the advisory firm was “on the ground [and] is reviewing the [companies’] books and records and assisting with the preparation of bankruptcy disclosure”, it said.

The US Securities and Exchange Commission has recently widened an investigation into FTX, which includes a probe of its crypto lending products as well as its management of customer funds, according to a person familiar with the matter.

FTX said in the filing that the swift move into bankruptcy was necessary to “secure and marshal its assets, and . . . to reorganise or sell FTX’s complex array of businesses, investments and property around the world for the benefit of its stakeholders”.

On Tuesday, US lawmakers expressed concern about the risks posed to retail investors and the broader financial system by the implosion of FTX, and stepped up their calls for more stringent oversight of cryptocurrencies, at a hearing with the country’s top banking regulators.

“This should be a renewed call for Congress to take a serious look at crypto exchanges and lending platforms, many of which engage in risky behaviours while marketing themselves as safe for consumers,” said Bob Menendez, the Democrat senator from New Jersey.

Michael Barr, the Fed’s vice-chair for supervision, warned of the potential for “systemic risk” should “interlinkages develop” between the crypto universe and more traditional corners of the financial system.

“When regulation is lax or behind the curve, it can facilitate risk-taking and a race to the bottom that puts consumers, businesses and the economy in danger and discredits new products and services with consumers and investors,” he said.

-https://www.ft.com/content/6a0ea717-b57 ... 4523855172

[TheGreenAnger]

Adios Genesis Global Capital.

Another multi-billion dollar lending unit of a cryptocurrency firm has been forced to halt withdrawals, the company’s CEO announced.

Genesis Global Capital, which had $2.8 billion in total active loans at the end of September, blamed the collapse of the crypto exchange FTX for temporarily suspending its services.

The price of bitcoin slid further following the news on Wednesday, with the cryptocurrency currently hovering above a two-year low.

Interim CEO Derar Islim told customers that Genesis’ trading and custody services remained fully operational.

Amanda Cowie, vice president of communications at Genesis owner Digital Currency Group (DCG), said that there was also “no impact on the business operations” of DCG and any of its subsidiaries.

“Today Genesis Global Capital, Genesis’s lending business, made the difficult decision to temporarily suspend redemptions and new loan originations,” Ms Cowie said.

“This decision was made in response to the extreme market dislocation and loss of industry confidence caused by the FTX implosion.”

Bitcoin is down more than 75 per cent since hitting an all-time high of close to $69,000 in November 2021.

After several months of stability, bitcoin crashed below $16,000 for the first time since November 2020 following the downfall of FTX.

The world’s third largest exchange by trading volume suspended withdrawals of more than a million customers last week, according to court filings, after a liquidity crisis forced the firm to file for bankruptcy.

“We have hired the best advisors in the industry to explore all possible options,” the company wrote.

“Next week, we will deliver a plan for the lending business. We’re working tirelessly to identify the best solutions for the lending business, including among other things, sourcing new liquidity.”

https://www.independent.co.uk/tech/bitc ... 26380.html

[Hydromet]

Why am I neither surprised nor disappointed?

[4mastacker]

There are certain subjects the mere mention of which cause my brain to switch to standby. Crypto currency is one of them.

+1.

[Fox3WheresMyBanana]

It seems there are a lot of people who think that fiat is just a make of car.

[TheGreenAnger]

It seems there are a lot of people who think that fiat is just a make of car.

Does that quip have much currency?